The volume effect in cartel cases—a special challenge for damage quantification?

Abstract

Abstract Cartel damage occurs in many different shapes. Actors that are beyond doubt heavily affected by a cartel agreement are the purchasers of the cartel—the direct same as the indirect ones. Economic insights teach us that they do not only suffer damage in the form of the overcharge they paid or of shares of this overcharge that are passed-on to lower levels in the supply chain, but also in the form of the volume effect: a price increase as induced by a cartel agreement leads to a reduction in quantities sold, the consequence of which is typically lost profit—ie the volume effect. Whereas this effect is firmly established in economics, on the legal side it is so far discussed only on a superficial level with legal practice lacking behind in its recognition altogether. This is particularly surprising in the German and Spanish legal order where the highest courts many years ago did recognize the relevance of this damage component in pass-on situations. This article thoroughly analyses the economic and legal perspectives in respect of volume effects.